The Air Force is barring its personnel from using work computers to view the Web sites of The New York Times and more than 25 other news organizations and blogs that have posted secret cables obtained by WikiLeaks, Air Force officials said Tuesday.

When Air Force personnel on the service’s computer network try to view the Web sites of The Times, the British newspaper The Guardian, the German magazine Der Spiegel, the Spanish newspaper El País and the French newspaper Le Monde, as well as other sites that posted full confidential cables, the screen says “Access Denied: Internet usage is logged and monitored,” according to an Air Force official whose access was blocked and who shared the screen warning with The Times. Violators are warned that they face punishment if they try to view classified material from unauthorized Web sites.

Some Air Force officials acknowledged that the steps taken might be in vain since many military personnel could gain access to the documents from home computers, despite admonishments from superiors not to read the cables without proper clearances.

Cyber network specialists within the Air Force Space Command last week followed longstanding procedures to keep classified information off unclassified computer systems. “News media Web sites will be blocked if they post classified documents from the WikiLeaks Web site,” said Lt. Col. Brenda Campbell, a spokeswoman for the Air Force Space Command, a unit of which oversees Air Force cyber systems. “This is similar to how we’d block any other Web site that posted classified information.”

Colonel Campbell said that only sites posting full classified documents, not just excerpts, would be blocked. “When classified documents appear on a Web site, a judgment will be made whether it will be blocked,” she said. “It’s an issue we’re working through right now.”

Spokesmen for the Army, Navy and Marines said they were not blocking the Web sites of news organizations, largely because guidance has already been issued by the Obama administration and the Defense Department directing hundreds of thousands of federal employees and contractors not to read the secret cables and other classified documents published by WikiLeaks unless the workers have the required security clearance or authorization.

“Classified information, whether or not already posted on public websites or disclosed to the media, remains classified, and must be treated as such by federal employees and contractors, until it is declassified by an appropriate U.S. Government authority,” said a notice sent on Dec. 3 by the Office of Management and Budget, which is part of the White House, to agency and department heads.

A Defense Department spokesman, Col. David Lapan, in an e-mail on Tuesday night sought to distance the department from the Air Force’s action to block access to the media Web sites: “This is not DoD-directed or DoD-wide.”

The Air Force’s action was first reported on The Wall Street Journal’s Web site late Tuesday and underscores the wide-ranging impact of the recent release of secret State Department documents by WikiLeaks, and five news organizations, including The Times. It also illustrates the contortions the military and other government agencies appear to be going through to limit the spread of classified information that has become widely available in the public domain.

“It is unfortunate that the U.S. Air Force has chosen not to allow its personnel access to information that virtually everyone else in the world can access,” said a spokeswoman for The Times, Danielle Rhoades Ha. A senior administration official said Tuesday that the administration’s policy contained some leeway, for instance, to allow certain employees to download information in order for them to be able to verify that classified information was leaking into the public domain, and to assess damage to national security and potential danger to sources.

Steven Aftergood of the Federation of American Scientists, a secrecy specialist, said dozens of agencies, as well as branches of the military and government contractors, had issued their own policy instructions based on the Office of Management and Budget memo.

“It’s a self-defeating policy that will leave government employees less informed than they ought to be,” Mr. Aftergood said.

The most baffling thing about the Wikileaks Cablegate kerfuffle is the massive foot-shooting overreaction across the entire American political spectrum. Here in the rest of the world (okay, in Canada), we’ve already moved on, because (to date) the cables are more shrug-inducing than explosive—but US senators are still in the throes of a bizarre frenzy of rabid chest-beating and tooth-gnashing.

Dianne Feinstein, a Democrat, has called for Julian Assange’s prosecution, despite the general consensus that he hasn’t actually committed any American crime. Mitch McConnell, a Republican, has a slightly clearer-eyed view; he wants the law changed so that Assange can be prosecuted as a terrorist. Joe Lieberman wants a criminal investigation of not just Assange but also the New York Times.

What exactly do they hope to accomplish? Do they think that if they do somehow manage to convict Assange—who, remember, was only the publisher, not the leaker—they will have eliminated the threat of Internet information dissemination forever? Don’t they realize that with every boneheaded speech and op-ed, they ratchet up the free publicity and do Wikileaks a huge favor, when a dignified silence plus a few veiled threats would have been far more effective? Can they really be so stupid?

Well, yes. The US government is like Wall Street: behind their veneer of all-powerful control, most of the people who run things are not particularly bright. I just read Michael Lewis’s The Big Short, which depicts the financial collapse of 2008 as a catastrophe caused not because Wall Street was corrupt—which would have been almost okay—but because it was lethally stupid.  His next book should be about Washington.

The American diplomatic corps actually comes across as smart and competent in the Wikileaked cables. Unfortunately, the politicians they report to seem anything but. The scariest truth that Wikileaks has confirmed is that most of the world’s decisionmakers, like most Wall Street ‘wizards’, are petty, bureaucratic, dogmatic, myopic, and hostile to any innovation, largely because they’re not very intelligent. Not that smarts are everything, but it’s hard to tackle complex problems when you don’t fully understand them. It’s easy to forget this in the tech world, which is (relatively speaking) a results-oriented meritocracy … until you step into most governments or megacorporations, and find that suddenly the ambient IQ has dropped 20 points.

The tech sector is the only thing America has going for it these days. (Unless you count crumbling infrastructure, runaway debt, paralyzed government, or a trillion-dollar military bogged down in pointless faraway non-wars.) Unfortunately, the American government seems too dumb to realize this: so they maintain stupid visa laws, while ignoring smart alternatives; keep playing fast and loose, at best, with net neutrality; and, oh yes, plan to wiretap (and—thanks to Wikileaks—censor) the entire Internet, at great cost, apparently in the hope that bad guys will never discover the magic of public-key encryption.

Wanted by the law across multiple countries, threatened with military action by US hawks, shut out by internet vendors from Amazon to PayPal, Wikileaks leader Julian Assange may still be named TIME Magazine's Person of the Year for 2010. He's currently leading in the magazine's online poll, ahead of the Prime Minister of Turkey, Recep Erdogan, in influence score if not in votes.

Erdogan is hardly uncontroversial, either, having challenged Israel vehemently and collaborating with Turkish nationalists TIME says still deny the history of the Armenian genocide. The Person of the Year award this year is basically a media statement for or against the legitimacy of Wikileaks and what it represents. The third candidate on the list might represent the perfect abdication of responsibility for answering this or any serious questions: it's Lady Gaga.

What Wikileaks Represents

Depending on your perspective, Assange and Wikileaks probably represent one of two things. As GigaOm's Mathew Ingram wrote this weekend, "Some argue that there is nothing journalistic about the organization whatsoever, and that it is simply a lawless group of misfits spreading information around that it doesn't have the right to distribute, without caring for the effects of its actions."

Journalism thought leader Jay Rosen, however, calls Wikileaks "the world's first stateless news organization."

The organization, which isn't at all a wiki like Wikipedia is anymore, does represent something very interesting about contemporary technology and media. This much is hard to argue with, I think, no matter your perspective: Written about by websites everywhere, spread across millions of Twitter and Facebook conversations, mirrored by hundreds of independent servers, Wikileaks represents mass accessibility of information that simply cannot be shut down, despite the best efforts of authorities.

Unlike Amazon, Paypal and others, Twitter and Facebook have allowed the organization to continue using their services. Were that to change, we'd be talking about a different ball game. Neither company has responded to inquiries about their official positions on their Wikileaks accounts, but neither has shut down the accounts, either.

Twitter is passing around a press statement this morning stating that it is not censoring Wikileaks from its "trending topics" section, but asked point blank about whether it will permit the Wikileaks account to remain online or whether it will be shut down, Twitter's Matt Graves told ReadWriteWeb, "We've got no additional comment beyond the statement."

Genie, Meet the World Outside a Bottle

It's also notable that most of the "state secrets" being distributed by Wikileaks are allegedly from troves of information that thousands, if not millions, of people had security clearance to see already. There are 3 million people in the U.S. with some level of security clearance to access classified government documents. It's hard to believe that malevolent actors who wanted to see what Wikileaks exposes didn't have the opportunity to, though now the documents have been analyzed by hundreds of outside analysts, indexed by search engines and pointed to by countless websites. That scale of eyeballs, minds, machines and social connections is the biggest game changer, not the mere availability of the information.

The U.S. government made the Internet fault tolerant through redundant connections. Now unflattering information about its own activities has flooded that network it helped create. The Internet is a genie that cannot be put back in the bottle.

No one has forced discussion of these questions before as much as Julian Assange and Wikileaks. I expect that TIME will award Assange the Person of the Year Award, not for any of the revelations that Wikileaks exposed, but for the way it forced the issue of a radically transparent global communications network. The magazine may reference its choice of Joseph Stalin in 1939 to emphasize that the award is not a sign of approval or support, but such an award would doubtlessly confer a new sense of legitimacy to Wikileaks and the issues the organization represents.

You can't change your Facebook profile from dating to single these days without all your friends finding out - and neither can international diplomats put digital pen to paper without some concern that their words will be made available for universal access and analysis. How will that change the world of international relations? I suspect we're about to find out.

Perhaps Lady Gaga will be the Person of the Year instead, though.

Back in September,it was reported that whistleblowing site Wikileaks had hemorrhaged a number of prominent personnel. Now some of those who've left have begun assembling an organization designed to directly compete with its parent.

The alleged high-handedness of the organization's founder, Julian Assange, and the beliefs of some of his co-workers' belief that he has not properly protected lives by carefully redacting the Iraq documents, has created a rift and the rift has created and opportunity.

Wikileaks is probably best known for releasing 91,000 secret documents from the Afghanistan War and 400,000 field reports from the Iraq War.

Assange and his organization have been criticized, by a spectrum of parties ranging from the U.S. government to Reporters Without Borders, for spending less attention on removing names and identifying information attached to civilians who have helped U.S. and coalition troops in Afghanistan. Shortly after that leak, Taliban sources announced they were using the documents to prepare a purge; the same thing happened after the Iraq publication.

One of the most prominent internal critics was Daniel Domscheit-Berg, who, as Daniel Schmitt, served as Wikileaks's German spokesman. Among his concerns were the level of redaction, as well as Assange's distracting public activities and neglect in releasing other important, but less attention-grabbing, documents unrelated to the conflicts.

Domscheit-Berg is one of the leaders of the new whistleblower undertaking. The group's personnel looks to possibly number between half a dozen and a dozen people so far.

The new organization would not be the only alternative to Wikileaks, as the Wall Street Journal points out. The most prominent rival is probably Cryptome, who have leaked documents concerning Wikileaks.

Do They Control the Government?

Having tackled the secretive Catholic conservative group Opus Dei, Dan Brown says he's writing his next book about the Freemasons.

The Freemasons say they are simply a fraternity that aims to make good men better and to support each other. Because they are essentially secret, however, groups such as the Freemasons can stir all kinds of theories.

The all-seeing eye atop the pyramid on the $1 bill is a Masonic symbol. Some say that some of the great American buildings have Masonic symbols incorporated into their architecture.

Many of our Founding Fathers, including George Washington, Benjamin Franklin and John Hancock, were Freemasons. There are currently 1.7 million members, though membership has been declining since 1960.

Some conspiracy theorists say that the Freemasons, or Masons, have designs on government control.

"The thing people think about when they think of Masonry is secrecy. They think of this hidden order that they know almost nothing about," said Steven C. Bullock, author of "Revolutionary Brotherhood: Freemasonry and the Transformation of the American Social Order."

The Freemasons have a 500-year history. Originally, they were stonemasons who built the great cathedrals of Europe.

"They traveled widely, because a town would have a church built maybe once every hundred years," said Margaret Jacob, author of "The Origins of Freemasonry: Facts and Fictions."

"As they traveled, they had secret passwords and signs so when they came into a town and said, 'I'm a stonemason, I want to work,' they had to be able to prove they were a member of the guild."

S. Brent Morris, who is, among other things, a 33-Degree Mason, master of the royal secret and managing editor of the Scottish Rite Journal, said that although Freemasonry was not a religion, it had overarching religious principles that were part of Masons' rich traditions.

"The Freemasons did something very radical 300 years ago. We said that men can agree that God exists and he compels them to do good in their life and we can stop all religious discussion at that point and go out and do good and help mankind. So Freemasons invite any believer in God to join them."

Morris said Freemasons displayed a Bible, a Koran and a Torah on their altar. Another powerful symbol of the tradition is the sword carried by the grand sword bearer of the Supreme Council, the highest order within the Freemasons that meets every few years.

Yet the society was so closed centuries ago, is so closed still, that the penalty for revealing Freemason secrets is supposed to be gory death.

Richard E. Fletcher, the executive secretary of the Masonic Service Association of North America, said that the Freemasons was not an enigmatic organization. Things like secret handshakes date back centuries.

"The handshakes are a throwback to our early days when Freemasonry was related to actual builders and stone," he said. "That is how they prove they are a guild member, because most were illiterate."

Although there were once anti-Masonic political parties and early 19th-century President John Quincy Adams called the Freemasons a power-hungry "boa constrictor" of an organization, Fletcher said Freemasonry had always been about improving oneself. The nature of the self-reflective process is private, he said, and many people mistake that for secrecy.

"While he is being challenged to look inward at himself as a person, he is going to have to self-reflect, contemplate, think. This can't be done in a public forum," he said. "We are pledging ourselves to become better people in our home, in our churches, in all walks of life."

Throughout the centuries, the Freemasons evolved into a wide-ranging, worldwide fraternity with many members having considerable power and influence. In this country, that influence has sometimes reached all the way into the White House. Fourteen of 43 presidents have been Freemasons.

"More than one-third of the presidents belonged to the fraternity, so this is a substantial tradition of politicians being involved in Masonry, so there are fears at times in American history that Masons are too involved in politics," Bullock said.

There are all kinds of stories: that Masons wanted to control a government and thus were behind the American Revolution. Some claim that the Masons killed President Kennedy.

"These are terrific stories. They're yarns. There is not, however, a shred of historical evidence to back them up," Jacob said.

"Their grand secret is that they have no secret," Bullock said. "They're claiming that they're hiding something, but really part of the point is to pretend that you're hiding something."

Still Brown can have a field day in his next book. After all, how did a Masonic symbol -- if it is a Masonic symbol -- wind up on our $1 bill?

Some critics point to these conspiracy theories and group secrets as reasons for the drop off in Mason membership, but Morris said other organizations were experiencing a similar problem.

"It's also diminished in virtually every voluntary organization in the United States," Morris said. "When you look at all the organizations declining in membership and participation, I think you can't point to the Masonic traditions."

Swedish prosecutors withdrew an arrest warrant for the founder of WikiLeaks on Saturday, saying less than a day after the document was issued that it was based on an unfounded accusation of rape.

The accusation had been labeled a dirty trick by Julian Assange and his group, who are preparing to release a fresh batch of classified U.S. documents from the Afghan war.

Swedish prosecutors had urged Assange -- a nomadic 39-year-old Australian whose whereabouts were unclear -- to turn himself in to police to face questioning in one case involving suspicions of rape and another based on an accusation of molestation.

"I don't think there is reason to suspect that he has committed rape," chief prosecutor Eva Finne said, in announcing the withdrawal of the warrant. She did not address the status of the molestation case, a less serious charge that would not lead to an arrest warrant.

Prosecutors did not answer phone calls seeking further comment.

Assange had dismissed the rape allegations in a statement on WikiLeaks' Twitter page, saying "the charges are without basis and their issue at this moment is deeply disturbing." His whereabouts were not immediately known.

He was in Sweden last week seeking legal protection for the whistle-blower website, which angered the Obama administration for publishing thousands of leaked documents about U.S. military activities in Iraq and Afghanistan.

The first files in Wikileaks' "Afghan War Diary" revealed classified military documents covering the war in Afghanistan from 2004 to 2010. Assange said Wednesday that WikiLeaks plans to release a new batch of 15,000 documents from the Afghan war within weeks.

The Pentagon says the information could risk the lives of U.S. troops and their Afghan helpers and have demanded WikiLeaks return all leaked documents and remove them from the Internet.

Assange has no permanent address and travels frequently -- jumping from one friend's place to the next. He disappears from public view for months at a time, only to reappear in the full glare of the cameras at packed news conferences to discuss his site's latest disclosure.

Assange declined to talk about his background at a news conference in Stockholm a week ago. Equally secretive is the small team behind WikiLeaks, reportedly just a half-dozen people and casual volunteers who offer their services as needed.

A WikiLeaks spokesman, who says he goes by the name Daniel Schmitt in order to protect his identity, told The Associated Press in a telephone interview from Iceland that the "extremely serious allegations" came as a complete surprise.

Apart from the comment from Assange, WikiLeaks' Twitter page had a link to an article in Swedish tabloid Expressen, which first reported the allegations.

"We were warned to expect 'dirty tricks.' Now we have the first one," it said.

Assange was in Sweden last week partly to apply for a publishing certificate to make sure the website, which has servers in Sweden, can take full advantage of Swedish laws protecting whistle-blowers.

He also spoke at a seminar hosted by the Christian faction of the opposition Social Democratic party and announced he would write bimonthly columns for a left-wing Swedish newspaper.

WikiLeaks founder Julian Assange said Wednesday the Pentagon has expressed willingness to discuss the online whistleblower's request for help in reviewing classified documents from the Afghan war and removing information that could harm civilians.

"This week we received contact through our lawyers that the General Counsel of the U.S. Army says now that they want to discuss the issue," Assange told The Associated Press by telephone. He later corrected himself to say he meant the general counsel of the Pentagon.

Assange added that the contacts have been brokered by the U.S. Army Criminal Investigation Command, or CID.

Pentagon spokesman Bryan Whitman denied any direct contacts between the Pentagon and WikiLeaks. He also said the Pentagon is not interested in cooperating with WikiLeaks, which has asked for help in reviewing the documents to purge the names of Afghan informants from the files.

"We are not interested in negotiating some sort of minimized or sanitized version of classified documents," he said.

"These documents are property of the United States government. The unauthorized release of them threatens the lives of coalition forces as well as Afghan nationals."

Asked if CID had brokered contact between defense lawyers and Wikileaks lawyers, Whitman said: "CID is conducting an investigation and I am not going to comment on their investigation."

Assange said Wednesday that "contact has been established" but added it was not clear whether and how the U.S. military would assist WikiLeaks.

"It is always positive for parties to talk to each other," Assange said. "We welcome their engagement."

He reiterated that WikiLeaks plans to release its second batch of secret Afghan war documents within "two weeks to a month."

The first files in its "Afghan War Diary" laid bare classified military documents covering the war in Afghanistan from 2004 to 2010. The release angered U.S. officials, energized critics of the NATO-led campaign, and drew the attention of the Taliban, which has promised to use the material to track down people it considers traitors.

Non-governmental organizations, including the Paris-based media watchdog Reporters Without Borders, have criticized WikiLeaks as being irresponsible.

WikiLeaks describes itself as a public service organization for whistleblowers, journalists and activists.

"We encourage other media and human rights groups who have a genuine concern about reviewing the material to assist us with the difficult and very expensive task of getting a large historical archive into the public's record," Assange said.

The Australian was in Sweden in part to prepare an application for a publishing certificate that would allow WikiLeaks to take full advantage of the Scandinavian nation's press freedom laws.

That also means WikiLeaks would have to appoint a publisher that could be held legally responsible for the material. Assange said that person would be "either me or one of our Swedish people."

WikiLeaks routes its material through Sweden and Belgium because of the whistleblower protection offered by laws in those countries. But it also has backup servers in other countries to make sure the site is not shut down, Assange said.The Australian was in Sweden in part to prepare an application for a publishing certificate that would allow WikiLeaks to take full advantage of the Scandinavian nation's press freedom laws.

That also means WikiLeaks would have to appoint a publisher that could be held legally responsible for the material. Assange said that person would be "either me or one of our Swedish people."

WikiLeaks routes its material through Sweden and Belgium because of the whistleblower protection offered by laws in those countries. But it also has backup servers in other countries to make sure the site is not shut down, Assange said.

(This version CORRECTS Updates with Assange correcting earlier statement to say contact was with Pentagon, not U.S. Army; comment from Washington. This story is part of AP's general news and financial services.)

Via:Wired

Adrian Lamo, the former computer hacker who tipped off federal authorities to WikiLeaks suspect Bradley Manning, says two men in the Boston area have told Lamo in phone conversations that they assisted Manning.

Lamo said both men attend the Massachusetts Institute of Technology, but he refused to identify them because, he said, at least one of them has threatened him. One of these men allegedly told Lamo they gave encryption software to Manning and taught the Army private how to use it, Lamo said.

Manning, an Army intelligence analyst, is being held in solitary confinement at a Virginia detention facility. He is charged with leaking an airstrike video that the whistleblower website WikiLeaks published in April, and Pentagon officials say he is the prime suspect in last week's disclosure of thousands of field reports from the war in Afghanistan to the site.

Lamo claimed both men are working for WikiLeaks. Also, both men are Facebook friends with Lamo and Manning, and at least one continues to post Facebook messages on Lamo's wall, the former hacker said.

Asked for comment about Lamo's allegation that men working for WikiLeaks assisted Manning, WikiLeaks responded in an e-mail: "As a matter of policy, we do not discuss any matters to do with allegations relating to the identity of sources."

The New York Times reported Saturday that Army investigators looking into the document leak have expanded their inquiry to include friends and associates who may have helped Manning. Specifically, the Times spoke to two civilians interviewed in recent weeks by the Army's criminal division, who said that investigators apparently believed that the friends, who include students from MIT and Boston University, might have connections to WikiLeaks. The civilians, who the Times did not name, told the newspaper they had no connection to WikiLeaks.

The Boston Globe interviewed a recent MIT graduate who it said acknowledged Saturday that he met Manning in January and exchanged as many as 10 e-mails with him about security issues. But the individual "adamantly" denied any role in the document leak, the Globe reported. The Globe also reported that this MIT graduate, who spoke on the condition of anonymity, said he was interviewed several months ago by Army investigators to find out whether he or "others in the local computer hacker community" helped Manning.

A spokeswoman for MIT, Patti Richards, told CNN: "We are monitoring the situation closely, but are not commenting at this time."

CNN has previously reported that the FBI is assisting the Defense Department in the WikiLeaks investigation of Manning. One FBI official told CNN the bureau is involved in the investigation of potential civilian co-conspirators who may have played a role in the leaking of the classified material.

Attempts to reach an attorney for Manning have so far been unsuccessful.

A Journal investigation finds that one of the fastest-growing businesses on the Internet is the business of spying on consumers. First in a series.

Hidden inside Ashley Hayes-Beaty's computer, a tiny file helps gather personal details about her, all to be put up for sale for a tenth of a penny.

The file consists of a single code— 4c812db292272995e5416a323e79bd37—that secretly identifies her as a 26-year-old female in Nashville, Tenn.

The code knows that her favorite movies include "The Princess Bride," "50 First Dates" and "10 Things I Hate About You." It knows she enjoys the "Sex and the City" series. It knows she browses entertainment news and likes to take quizzes.

"Well, I like to think I have some mystery left to me, but apparently not!" Ms. Hayes-Beaty said when told what that snippet of code reveals about her. "The profile is eerily correct."

Ms. Hayes-Beaty is being monitored by Lotame Solutions Inc., a New York company that uses sophisticated software called a "beacon" to capture what people are typing on a website—their comments on movies, say, or their interest in parenting and pregnancy. Lotame packages that data into profiles about individuals, without determining a person's name, and sells the profiles to companies seeking customers. Ms. Hayes-Beaty's tastes can be sold wholesale (a batch of movie lovers is $1 per thousand) or customized (26-year-old Southern fans of "50 First Dates").

"We can segment it all the way down to one person," says Eric Porres, Lotame's chief marketing officer.

One of the fastest-growing businesses on the Internet, a Wall Street Journal investigation has found, is the business of spying on Internet users.

The Journal conducted a comprehensive study that assesses and analyzes the broad array of cookies and other surveillance technology that companies are deploying on Internet users. It reveals that the tracking of consumers has grown both far more pervasive and far more intrusive than is realized by all but a handful of people in the vanguard of the industry.

• The study found that the nation's 50 top websites on average installed 64 pieces of tracking technology onto the computers of visitors, usually with no warning. A dozen sites each installed more than a hundred. The nonprofit Wikipedia installed none.

• Tracking technology is getting smarter and more intrusive. Monitoring used to be limited mainly to "cookie" files that record websites people visit. But the Journal found new tools that scan in real time what people are doing on a Web page, then instantly assess location, income, shopping interests and even medical conditions. Some tools surreptitiously re-spawn themselves even after users try to delete them.

• These profiles of individuals, constantly refreshed, are bought and sold on stock-market-like exchanges that have sprung up in the past 18 months.

It's rarely a coincidence when you see Web ads for products that match your interests. WSJ's Christina Tsuei explains how advertisers use cookies to track your online habits.

The new technologies are transforming the Internet economy. Advertisers once primarily bought ads on specific Web pages—a car ad on a car site. Now, advertisers are paying a premium to follow people around the Internet, wherever they go, with highly specific marketing messages

In between the Internet user and the advertiser, the Journal identified more than 100 middlemen—tracking companies, data brokers and advertising networks—competing to meet the growing demand for data on individual behavior and interests.

The data on Ms. Hayes-Beaty's film-watching habits, for instance, is being offered to advertisers on BlueKai Inc., one of the new data exchanges.

"It is a sea change in the way the industry works," says Omar Tawakol, CEO of BlueKai. "Advertisers want to buy access to people, not Web pages."

The Journal examined the 50 most popular U.S. websites, which account for about 40% of the Web pages viewed by Americans. (The Journal also tested its own site, WSJ.com.) It then analyzed the tracking files and programs these sites downloaded onto a test computer.

As a group, the top 50 sites placed 3,180 tracking files in total on the Journal's test computer. Nearly a third of these were innocuous, deployed to remember the password to a favorite site or tally most-popular articles.

But over two-thirds—2,224—were installed by 131 companies, many of which are in the business of tracking Web users to create rich databases of consumer profiles that can be sold.

The top venue for such technology, the Journal found, was IAC/InterActive Corp.'s Dictionary.com. A visit to the online dictionary site resulted in 234 files or programs being downloaded onto the Journal's test computer, 223 of which were from companies that track Web users.

How to Protect Yourself

Almost every major website you visit is tracking your online activity. Here's a step-by-step guide to fending off trackers.

The information that companies gather is anonymous, in the sense that Internet users are identified by a number assigned to their computer, not by a specific person's name. Lotame, for instance, says it doesn't know the name of users such as Ms. Hayes-Beaty—only their behavior and attributes, identified by code number. People who don't want to be tracked can remove themselves from Lotame's system.

And the industry says the data are used harmlessly. David Moore, chairman of 24/7 RealMedia Inc., an ad network owned by WPP PLC, says tracking gives Internet users better advertising.

"When an ad is targeted properly, it ceases to be an ad, it becomes important information," he says.

Tracking isn't new. But the technology is growing so powerful and ubiquitous that even some of America's biggest sites say they were unaware, until informed by the Journal, that they were installing intrusive files on visitors' computers.

The Journal found that Microsoft Corp.'s popular Web portal, MSN.com, planted a tracking file packed with data: It had a prediction of a surfer's age, ZIP Code and gender, plus a code containing estimates of income, marital status, presence of children and home ownership, according to the tracking company that created the file, Targus Information Corp.

Both Targus and Microsoft said they didn't know how the file got onto MSN.com, and added that the tool didn't contain "personally identifiable" information.

Tracking is done by tiny files and programs known as "cookies," "Flash cookies" and "beacons." They are placed on a computer when a user visits a website. U.S. courts have ruled that it is legal to deploy the simplest type, cookies, just as someone using a telephone might allow a friend to listen in on a conversation. Courts haven't ruled on the more complex trackers.

The most intrusive monitoring comes from what are known in the business as "third party" tracking files. They work like this: The first time a site is visited, it installs a tracking file, which assigns the computer a unique ID number. Later, when the user visits another site affiliated with the same tracking company, it can take note of where that user was before, and where he is now. This way, over time the company can build a robust profile.

One such ecosystem is Yahoo Inc.'s ad network, which collects fees by placing targeted advertisements on websites. Yahoo's network knows many things about recent high-school graduate Cate Reid. One is that she is a 13- to 18-year-old female interested in weight loss. Ms. Reid was able to determine this when a reporter showed her a little-known feature on Yahoo's website, the Ad Interest Manager, that displays some of the information Yahoo had collected about her.

The Tracking Ecosystem

Surfing the Internet kickstarts a process that passes information about you and your interests to tracking companies and advertisers. See how it works.

Yahoo's take on Ms. Reid, who was 17 years old at the time, hit the mark: She was, in fact, worried that she may be 15 pounds too heavy for her 5-foot, 6-inch frame. She says she often does online research about weight loss.

"Every time I go on the Internet," she says, she sees weight-loss ads. "I'm self-conscious about my weight," says Ms. Reid, whose father asked that her hometown not be given. "I try not to think about it…. Then [the ads] make me start thinking about it."

Yahoo spokeswoman Amber Allman says Yahoo doesn't knowingly target weight-loss ads at people under 18, though it does target adults.

"It's likely this user received an untargeted ad," Ms. Allman says. It's also possible Ms. Reid saw ads targeted at her by other tracking companies.

Information about people's moment-to-moment thoughts and actions, as revealed by their online activity, can change hands quickly. Within seconds of visiting eBay.com or Expedia.com, information detailing a Web surfer's activity there is likely to be auctioned on the data exchange run by BlueKai, the Seattle startup.

Each day, BlueKai sells 50 million pieces of information like this about specific individuals' browsing habits, for as little as a tenth of a cent apiece. The auctions can happen instantly, as a website is visited.

Spokespeople for eBay Inc. and Expedia Inc. both say the profiles BlueKai sells are anonymous and the people aren't identified as visitors of their sites. BlueKai says its own website gives consumers an easy way to see what it monitors about them.

Tracking files get onto websites, and downloaded to a computer, in several ways. Often, companies simply pay sites to distribute their tracking files.

But tracking companies sometimes hide their files within free software offered to websites, or hide them within other tracking files or ads. When this happens, websites aren't always aware that they're installing the files on visitors' computers.

Often staffed by "quants," or math gurus with expertise in quantitative analysis, some tracking companies use probability algorithms to try to pair what they know about a person's online behavior with data from offline sources about household income, geography and education, among other things.

The goal is to make sophisticated assumptions in real time—plans for a summer vacation, the likelihood of repaying a loan—and sell those conclusions.

Some financial companies are starting to use this formula to show entirely different pages to visitors, based on assumptions about their income and education levels.

Life-insurance site AccuquoteLife.com, a unit of Byron Udell & Associates Inc., last month tested a system showing visitors it determined to be suburban, college-educated baby-boomers a default policy of $2 million to $3 million, says Accuquote executive Sean Cheyney. A rural, working-class senior citizen might see a default policy for $250,000, he says.

"We're driving people down different lanes of the highway," Mr. Cheyney says.

Consumer tracking is the foundation of an online advertising economy that racked up $23 billion in ad spending last year. Tracking activity is exploding. Researchers at AT&T Labs and Worcester Polytechnic Institute last fall found tracking technology on 80% of 1,000 popular sites, up from 40% of those sites in 2005.

The Journal found tracking files that collect sensitive health and financial data. On Encyclopaedia Britannica Inc.'s dictionary website Merriam-Webster.com, one tracking file from Healthline Networks Inc., an ad network, scans the page a user is viewing and targets ads related to what it sees there. So, for example, a person looking up depression-related words could see Healthline ads for depression treatments on that page—and on subsequent pages viewed on other sites.

Healthline says it doesn't let advertisers track users around the Internet who have viewed sensitive topics such as HIV/AIDS, sexually transmitted diseases, eating disorders and impotence. The company does let advertisers track people with bipolar disorder, overactive bladder and anxiety, according to its marketing materials.

Targeted ads can get personal. Last year, Julia Preston, a 32-year-old education-software designer in Austin, Texas, researched uterine disorders online. Soon after, she started noticing fertility ads on sites she visited. She now knows she doesn't have a disorder, but still gets the ads.

It's "unnerving," she says.

Tracking became possible in 1994 when the tiny text files called cookies were introduced in an early browser, Netscape Navigator. Their purpose was user convenience: remembering contents of Web shopping carts.

Back then, online advertising barely existed. The first banner ad appeared the same year. When online ads got rolling during the dot-com boom of the late 1990s, advertisers were buying ads based on proximity to content—shoe ads on fashion sites.

The dot-com bust triggered a power shift in online advertising, away from websites and toward advertisers. Advertisers began paying for ads only if someone clicked on them. Sites and ad networks began using cookies aggressively in hopes of showing ads to people most likely to click on them, thus getting paid.

Targeted ads command a premium. Last year, the average cost of a targeted ad was $4.12 per thousand viewers, compared with $1.98 per thousand viewers for an untargeted ad, according to an ad-industry-sponsored study in March.

The Journal examined three kinds of tracking technology—basic cookies as well as more powerful "Flash cookies" and bits of software code called "beacons."

More than half of the sites examined by the Journal installed 23 or more "third party" cookies. Dictionary.com installed the most, placing 159 third-party cookies.

Cookies are typically used by tracking companies to build lists of pages visited from a specific computer. A newer type of technology, beacons, can watch even more activity.

Beacons, also known as "Web bugs" and "pixels," are small pieces of software that run on a Web page. They can track what a user is doing on the page, including what is being typed or where the mouse is moving.

The majority of sites examined by the Journal placed at least seven beacons from outside companies. Dictionary.com had the most, 41, including several from companies that track health conditions and one that says it can target consumers by dozens of factors, including zip code and race.

Dictionary.com President Shravan Goli attributed the presence of so many tracking tools to the fact that the site was working with a large number of ad networks, each of which places its own cookies and beacons. After the Journal contacted the company, it cut the number of networks it uses and beefed up its privacy policy to more fully disclose its practices.

The widespread use of Adobe Systems Inc.'s Flash software to play videos online offers another opportunity to track people. Flash cookies originally were meant to remember users' preferences, such as volume settings for online videos.

But Flash cookies can also be used by data collectors to re-install regular cookies that a user has deleted. This can circumvent a user's attempt to avoid being tracked online. Adobe condemns the practice.

Most sites examined by the Journal installed no Flash cookies. Comcast.net installed 55.

That finding surprised the company, which said it was unaware of them. Comcast Corp. subsequently determined that it had used a piece of free software from a company called Clearspring Technologies Inc. to display a slideshow of celebrity photos on Comcast.net. The Flash cookies were installed on Comcast's site by that slideshow, according to Comcast.

Clearspring, based in McLean, Va., says the 55 Flash cookies were a mistake. The company says it no longer uses Flash cookies for tracking.

CEO Hooman Radfar says Clearspring provides software and services to websites at no charge. In exchange, Clearspring collects data on consumers. It plans eventually to sell the data it collects to advertisers, he says, so that site users can be shown "ads that don't suck." Comcast's data won't be used, Clearspring says.

Wittingly or not, people pay a price in reduced privacy for the information and services they receive online. Dictionary.com, the site with the most tracking files, is a case study.

The site's annual revenue, about $9 million in 2009 according to an SEC filing, means the site is too small to support an extensive ad-sales team. So it needs to rely on the national ad-placing networks, whose business model is built on tracking.

Dictionary.com executives say the trade-off is fair for their users, who get free access to its dictionary and thesaurus service.

"Whether it's one or 10 cookies, it doesn't have any impact on the customer experience, and we disclose we do it," says Dictionary.com spokesman Nicholas Graham. "So what's the beef?"

The problem, say some industry veterans, is that so much consumer data is now up for sale, and there are no legal limits on how that data can be used.

Until recently, targeting consumers by health or financial status was considered off-limits by many large Internet ad companies. Now, some aim to take targeting to a new level by tapping online social networks.

Media6Degrees Inc., whose technology was found on three sites by the Journal, is pitching banks to use its data to size up consumers based on their social connections. The idea is that the creditworthy tend to hang out with the creditworthy, and deadbeats with deadbeats.

"There are applications of this technology that can be very powerful," says Tom Phillips, CEO of Media6Degrees. "Who knows how far we'd take it?"